Clayfin Technologies Private Limited, CHENNAI V. ITO Corporate Ward 3(2), CHENNAI

ITA 1071/CHNY/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8680 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 15-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BALINA SURESH BABU
• Keywords: Question of law; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI , .. , BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI DUVVURU R.L.REDDY, JUDICIAL MEMBER ./ ITA NOS.1071 & 1072/CHNY/2019 ! ! /ASSESSMENT YEARS: 2013-14 & 2014-15 M/S.CLAYFIN TECHNOLOGIES PVT. LTD., NO.58/1, BAZULLAH ROAD, T.NAGAR, CHENNAI. VS. THE INCOME TAX OFFICER, CORPORATE WARD-3(2), CHENNAI. [PAN: AACCV 9699 R ] ( $ /APPELLANT) ( %&$ /RESPONDENT) $ ' / APPELLANT BY : MR.SAROJ KUMAR PARIDA, ADV. %&$ ' /RESPONDENT BY : MR.BALINA SURESH BABU, JCIT ' /DATE OF HEARING : 18.07.2019 ' /DATE OF PRONOUNCEMENT : 10.09.2019 / O R D E R PER DUVVURU R.L.REDDY, JUDICIAL MEMBER : BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIRECTE D AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-7 , CHENNAI, IN ITA NO.11(T)/CIT(A)-7/2016-17 & IN ITA NO.339(T)/CIT(A) -7/2016-17 DATED 29.01.2019 FOR THE AYS 2013-14 & 2014-15 RESPECTIVE LY. ITA NOS.1071 & 1072/CHNY/2019 :- 2 -: 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN BOTH THE APP EALS IS THAT THE LD.CIT(A) ERRED IN DISALLOWING AN AMOUNT OF RS.21,7 9,320/- & RS.9,72,263/- FOR THE AYS 2013-14 & 2014-15 RESPECT IVELY ON ACCOUNT OF DELAYED REMITTANCE OF EMPLOYEES CONTRIBUTION TOWARD S EPF & ESI U/S.36(1)(VA) R.W.S.2(24)(X) OF THE INCOME TAX ACT, 1961. BRIEF FACTS OF THE CASE OF THE ASSESSEE ARE THAT THE ASSESSEE COMP ANY ENGAGED IN SERVICE PROVIDER FOR COMMERCIAL DOCUMENTS EXCHANGE FOR BANKS AND OTHER FINANCIAL INSTITUTIONS. THE ASSESSEE FILED ITS RET URN OF INCOME FOR THE AY 2013-14 ON 30.09.2013 ADMITTING LOSS OF RS.38,33,44 4/- AND FOR THE AY 2014-15 ON 28.11.2014 ADMITTING NIL INCOME WITH A CARRIED FORWARD LOSS OF RS.37,64,013/- AND BOTH THE CASES WERE SELECTED FOR SCRUTINY UNDER CASS AND NOTICES U/S.143(3) WERE SERVED ON THE ASS ESSEE. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE AO COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT ON 17.03.2016 DETE RMINING THE LOSS AT RS.1,27,31,860/- BY MAKING DISALLOWANCE/ADDITIONS O F RS.88,98,416/- FOR THE AY 2013-14 AND ON 21.12.2016 DETERMINING THE LO SS AT RS.93,03,106/- BY MAKING VARIOUS DISALLOWANCES OF R S.55,39,093/- AND ALSO DENIED THE CARRIED FORWARD LOSS TO THE TUNE OF RS.38,33,444/- & RS.37,64,013/- FOR THE AYS 2013-14 & 2014-15 RESPE CTIVELY. OUT OF THIS, THE DISALLOWANCE U/S.36(1)(VA) R.W.S.2(24)(X) OF RS .21,79,320/- & RS.9,72,263/- FOR THE AYS 2013-14 & 2014-15 RESPECT IVELY, WHICH IS THE SUBJECT MATTER OF THIS APPEAL. ITA NOS.1071 & 1072/CHNY/2019 :- 3 -: 3. AGGRIEVED, THE ASSESSEE HAS PREFERRED BOTH THE APP EALS BEFORE THE LD.CIT(A). THE LD.CIT(A) DIRECTED THE AO TO CONSID ER SOME OF THE DISALLOWANCES/ADDITIONS. HOWEVER, THE LD.CIT(A) CO NFIRMED THE DISALLOWANCE ON ACCOUNT OF THE REMITTANCE OF EMPLOY EES CONTRIBUTION TOWARDS EPF & ESI U/S.36(1)(VA) R.W.S.2(24)(X). 4. ON BEING AGGRIEVED, THE ASSESSEE PREFERRED BOTH TH E APPEALS BEFORE THE TRIBUNAL. THE LD.COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE LD.CIT(A) ERRED IN DISALLOWING CONTRIBUTION OF RS.2 1,79,320/- & RS.9,72,263/- FOR THE AYS 2013-14 & 2014-15 RESPECT IVELY ON ACCOUNT OF DELAYED REMITTANCES. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS REMITTED THE ABOVE SAID REMITTANCES WITHIN THE TIME LIMIT PR ESCRIBED U/S.139(1) OF THE ACT. THE SIMILAR ISSUE HAS BEEN TAKEN UP BY TH E HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S.INDUSTRIAL SECURITY & INTELLIGENCE INDIA PVT. LTD., IN ITA NOS.2048 & 2049/MDS/2014 DATED 31.10.2 014 AND DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE. THEREFORE, T HE ORDERS PASSED BY THE LD.CIT(A) LIABLE TO BE SET ASIDE. ON THE OTHER HAN D, THE LD.DR SUBMITTED THAT THE ASSESSEE FAILED TO REMIT THESE AMOUNTS WIT HIN THE TIME PRESCRIBED UNDER THE PF ACT. THEREFORE, THE ASSESSEE IS NOT EN TITLED FOR DEDUCTION AND THE SAID AMOUNTS TO BE TREATED AS INCOME WITHIN THE MEANING OF SEC.2(24)(X) OF THE ACT. THEREFORE, THE ORDERS PAS SED BY THE LD.CIT(A) LIABLE TO BE CONFIRMED. ITA NOS.1071 & 1072/CHNY/2019 :- 4 -: 5. WE HAVE HEARD BOTH THE PARTIES AND ALSO PERUSED TH E ORDERS PASSED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E OF M/S.INDUSTRIAL SECURITY & INTELLIGENCE INDIA PVT. LTD., IN TAX CAS E (APPEAL) NOS.585 & 586 OF 2015 DATED 24.07.2015, WHEREIN, PARA NOS.5 & 6 AS HELD AS UNDER: 5. WE FIND THAT THE TRIBUNAL HAS RIGHTLY RELIED ON THE DECISION OF THE SUPREME COURT IN THE CASE OF. CIT V. ALOM EXTRUSIONS LTD. REPORTED I N 319 ITR 306, WHEREBY, THE SUPREME COURT HELD THAT OMISSION OF SECOND PROVISO TO SECTI ON 435 AND AMENDMENT TO FIRST PROVISO BY FINANCE ACT, 2003 ARE CURATIVE IN NATURE AND ARE EFFECTIVE RETROSPECTIVELY, I.E., WITH EFFECT FROM 1.4.1988 I.E., THE DATE OF INSERTION OF FIRST PROVISO. THE DELHI HIGH COURT IN THE CASE OF CIT V. AMIL LTD. REPORTED IN 321 ITR 508 HE LD THAT IF THE ASSESSEE HAD DEPOSITED EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND AND ESI AFTER DUE DATE AS PRESCRIBED UNDER THE RELEVANT ACT, BUT BEFORE THE DUE DATE OF FILING OF RETURN UNDER THE INCOME TAX ACT, NO DISALLOWANCE COULD BE MADE IN VIEW OF THE PROVISION S OF SECTION 435 AS AMENDED BY FINANCE ACT, 2003. 6. IN THE PRESENT CASE, THE ASSESSEE HAD REMITTED T HE EMPLOYEES CONTRIBUTION BEYOND THE DUE DATE FOR PAYMENT, BUT WITHIN THE DUE DATE FOR F ILING THE RETURN OF INCOME. HENCE, FOLLOWING THE ABOVE-SAID DECISIONS, WE FIND NO REAS ON TO DIFFER WITH THE FINDINGS OF THE TRIBUNAL. ACCORDINGLY, WE FIND NO QUESTION OF LAW M UCH LESS ANY SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATION IN THESE APPEALS. ACCORDIN GLY, BOTH THE TAX CASE (APPEALS) STAND DISMISSED. NO COSTS. CONSEQUENTLY, M.P.NO.1 OF 2015 IS ALSO DISMISSED. 6. UPON PERUSAL OF THE ABOVE SAID DECISION RENDERED B Y THE HONBLE HIGH COURT, WE ARE OF THE VIEW THAT THIS ISSUE IS S QUARELY COVERED BY THE DECISION OF THE HONBLE HIGH COURT. HENCE, WE ARE OF THE VIEW THAT THE ORDERS PASSED BY THE LD.CIT(A) IS NOT IN ACCORDANCE WITH LAW AND THEREFORE, LIABLE TO BE SET ASIDE. CONSEQUENTLY, T HE GROUNDS RAISED BY THE ASSESSEE IN BOTH THE APPEALS ARE ALLOWED. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSE SSEE ARE ALLOWED. ORDER PRONOUNCED ON THE 10 TH DAY OF SEPTEMBER, 2019 IN CHENNAI. SD/- SD/- ( ) ( INTURI RAMA RAO ) 0 /ACCOUNTANT MEMBER ( 1 2 . . 5 ) ( DUVVURU R.L.REDDY ) 0 /JUDICIAL MEMBER ITA NOS.1071 & 1072/CHNY/2019 :- 5 -: /CHENNAI, 7 /DATED: 10 TH SEPTEMBER, 2019. TLN ' % 89 :9 /COPY TO: 1. $ /APPELLANT 4. ; /CIT 2. %&$ /RESPONDENT 5. 9 % /DR 3. ; ( ) /CIT(A) 6. ! /GF